Integrators Applying Recurring Monthly Revenue Model to Alarms & CCTV

Are you on a quest for recurring monthly revenue (RMR)?

Most alarm companies always have been, and now alarm integrators and CCTV integrators are trying to apply an RMR model to their own businesses as well. Marketers everywhere are pushing new RMR opportunities, but have they gone too far?

Unless you are monitoring video alarms, any good technical department would advise against the monthly fees for a CCTV system. The cost is hard to justify, especially to your client’s IT people, who are more proficient in the technology you are striving to sell.

IP solution education

As the industry transitions to IP-based solutions, many dealers are finding themselves selling to the IT department directly.

Dealers are pushed to familiarize themselves with terms like IP address, port forwarding, bandwidth, POE… and the list goes on. Even though many companies are doing a great job of educating themselves and preparing for new questions, often this is not enough. Since most CCTV systems do not require remote alarm monitoring, many dealers are trying to sell other RMR services they do not fully understand. In the attempt to justify these services they destroy all credibility with the client.

Video alarm monitoring and maintenance contracts aside, integrators are offering several products for a monthly fee.

NVR health monitoring fees?

Some of these include server health monitoring, email alerts, smartphone viewing capabilities, and dynamic DNS management; but before dealers try to sell these services they need to recognise that the IT staff can acquire them for free.

Health monitoring and email alerts are simple for IT staff to configure and, once setup correctly, require no further management. Remember, your client business has other servers that store and manage its most critical data. If it was not paying you to monitor the health of those servers why would it pay you to monitor the health of the NVR?

The same applies for smartphone video viewing. The majority of settings for remote viewing are configured through the end user’s firewall. Client software and smartphone apps from camera or NVR manufacturers are almost always free, and even third-party apps only require a one-time payment. IT staff set up exactly the same type of remote access for the servers on their networks, and short of Internet service, there is no monthly cost associated.

Dynamic DNS is a service that, granted, is not always free. However, many manufacturers of IT equipment and even several CCTV and NVR manufactures offer free Dynamic DNS services if you are using their equipment.

Don’t believe me? Take a look at Cisco’s Smart WiFi or D-Link’s mydlink.com. Both companies offer the equivalent features listed above for free, given you are using their products. Even if the camera systems you sell do not have their own Dynamic DNS service, there are plenty of free alternatives from sites like DNSDynamic.org and No-IP.com.

Integrators have made incredible progress towards understanding and maximizing new and emerging IP technology.

Nonetheless, as the line blurs between CCTV and IT, the industry will need to adjust, not only our installation services, but also our sales models. Just because we have lived off of RMR for many years does not mean we can apply it to every new venture we start.

I predict that over the next few years these products will disappear from the list of RMR services offered by alarm and CCTV integrators.

Worst of all, I think any integrator that has enjoyed the profits of selling zero-cost RMR services will suffer a wave of attrition as end users become more savvy.